November 03,2011

Press Contact:

Julia Lawless, Antonia Ferrier (Hatch), (202) 224-4515
John Hart (Coburn), (202) 224-2979

Top Ten Reasons Why Medicaid Needs Reform

Hatch, Coburn Release List to Illustrate Need to Fix Unsustainable Entitlement Program

WASHINGTON – Today, U.S. Senators Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, and Committee member Dr. Tom Coburn (R-Okla.) released ten examples of the fundamental flaws and problems confronting the Medicaid program that illustrate why this program needs to reformed.   

“Medicaid has turned into something it was never intended to be - an unsustainable entitlement for nearly one in four individuals, busting federal and state budgets and leaving future generations footing the bill,” said Hatch.  “Our nation cannot afford Medicaid as it is today.  It needs reform, and these examples leave little doubt about the need to fix this increasingly broken program.  As we work to slash our nation’s over $15 trillion debt, Medicaid simply must be on the table.”

“As a physician, I’ve seen first-hand how Medicaid is failing low-income patients.  Medicaid shows that access to a government program does not equal access to health care.   Forty percent of doctors don’t accept Medicaid patients because reimbursement costs are so low,” said Coburn.  “At the same time, patients who do access the program have worse outcomes.  Medicaid patients are almost 50 percent more likely to die after coronary artery bypass surgery and are at least twice as likely to die from cancer.  Instead of recklessly expanding this broken program, Congress should repeal the Affordable Care Act and replace it with real reforms that will put patients and doctors, not politicians and bureaucrats, in charge of health care.” 

Originally designed as a limited safety net for low-income Americans, Medicaid has grown exponentially, costing federal taxpayers $4.6 trillion over the next ten years, busting state budgets, and covering nearly one in four Americans – people the program was never meant to cover. 

Furthermore, Medicaid’s out-of-control expansion has led to poor care for patients due lack of access, waste and fraud, and physicians increasingly refusing to participate due to problems in the program. 

Below are ten examples that illustrate the problems confronting this entitlement program and the need for reform:

1. You can own a Rolls-Royce and still qualify for Medicaid today.
(Source: The Code of Federal Regulations: 20 CFR 416.1218.)
2. In New York, Medicaid paid providers to “treat” dead people, including one hospital that billed Medicaid for harvesting a cadaver’s organs.
(Source: New York Post: Raising the Dead in Medicaid ‘Rip-Offs’.  March 2010.)
3. In 2008 alone, Medicaid bureaucrats couldn’t track $45 billion to actual services for specific patients.
(Sources: Republican Staff Analysis using 13.3 percent of Medicaid’s $343 billion in 2008 spending, CMS: NHE Web Tables., Medicaid and CHIP Payment and Access Commission: Report to the Congress: The Evolution of Managed Care in Medicaid.  June 2011. )
4.   In 2010 alone, Medicaid paid an estimated $22.5 billion in improper claims. 
(Source: Government Accountability Offices: Improper Payments: Recent Efforts to Address Improper Payments and Remaining Challenges. April 2011)
5. A GAO investigation found that Medicaid subsidizes prescription drug addictions and the illicit sale of prescription drugs on the street.
(Source: Government Accountability Office: Fraud and Abuse Related to Controlled Substances Identified in Selected States.  September 2009)
6. In New York City, Medicaid dollars subsidized luxury cars and million-dollar salaries for CEOs of a non-profit organization.
(Source: New York Times: Reaping Millions in Nonprofit Care for Disabled. August 2011.)
7. In the State of Oregon, as many as one out of five individuals enrolled in Medicaid aren’t even eligible for the program.
(Source: HHS Secretary Kathleen Sebelius letter to Senator John Cornyn.  February 25, 2010.)
8. You can own a half a million dollar luxury home and still qualify for Medicaid.
(Source: The Social Security Act: Section 1917(f). )
9. An entire consulting industry now teaches how to do financial planning around Medicaid’s long-term care offerings, and not surprisingly, taxpayers now finance 40 percent of long-term care services in America through Medicaid.
(Sources: The Center for Long-Term Care Reform: Medicaid Planning Quotes and Kaiser Commission on Medicaid and the Uninsured:  Medicaid and Long-Term Care Services and Supports.  March 2011)
10. Individuals with an income of $64,000 a year – nearly $15,000 higher than the median household income in the United States – can now qualify for Medicaid.
(Sources: U.S. Census Bureau: Income, Poverty and Health Insurance Coverage in the United States: 2010.  September 2011 and Associated Press: Millions of middle-class people could get Medicaid. June 2011)